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House of brands vs. branded house: does it work for B2B?

January 19, 2009 10 comments

There is often a discussion among consumer product companies between having a “house of brands” and a “branded house.” Most consumer product conglomerates, such as Procter & Gamble, Johnson & Johnson, and Colgate-Palmolive, use the “house of brands” strategy. In other words, the product has the main brand name: Crest, Scope, Listerine, Head & Shoulders, Tylenol, and so forth. Very few consumers could accurately say which brand is owned by which company.

We’ve also witnessed this start to move into the consumer electronics space. Companies like Samsung and Sony still put their name on everything, but iPod and Zune are the dominant brands, leaving Apple and Microsoft to a lower-level brand.

This is because people can only associate one brand with a product. Al and Laura Ries, in their book The 22 Immutable Laws of Branding, say that successful brands associate a target concept with their brand, and that subbrands and superbrands are recipes for disaster. Witness the lack of success with brands that try to be everything to everyone: Yahoo, GM, Ford, and to a lesser extent Hyundai, Yamaha, and Mitsubishi have not established a dominant foothold in their spaces because consumers have not associated a concept to their brand.

I wonder if this works in the B2B space as well. When I was with Secure Computing, the marketing department kept trying to make “Secure Computing” the dominant brand, and their products Sidewinder, SmartFilter, and SafeWord second-tier brands. But the three product names stuck with customers, and the brand “Secure Computing” did not. (One of the other weaknesses is that “secure computing” is a generic term, and shared its name with a magazine and a Microsoft initiative — but that’s another discussion.)

But many B2B companies prefer an umbrella brand, and they can be successful with it. Oracle and Microsoft have been successful with (or in spite of) this strategy. However, Symantec has seen their market share fall recently, and Network Associates split into four different companies after their umbrella-brand strategy fell short.

I think that given the choice, even B2B companies should market their product brands, not their umbrella brands. B2B products, even if they’re focused on one specific vertical or one specific business function, often have different audiences. All audiences will try to categorize the dominant brand — that’s just how the human brain works. And if that association is with the umbrella brand, but is the wrong association with the brand’s other products, then it’s an uphill battle. The “branded house” strategy will actually undermine the sales process and create an uphill battle with each customer.

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